Victoria, BC Real Estate Market Evaluation – March 2025
Sales Activity
In February 2025, a total of 528 properties were sold in the Victoria Real Estate Board (VREB) region, marking a 12.3% increase from the 470 properties sold in February 2024.
- Condominium sales rose by 26.3%, with 192 units sold.
- Single-family home sales increased by 4.5%, with 234 units sold.
These figures suggest a stronger demand compared to last year, indicating buyer confidence in the market.
Price Trends
The MLS Home Price Index reported a 3.7% increase in the cost of single-family homes over the past year. However, condominium prices saw a slight decline of 0.5% during the same period.This variation in pricing reflects shifting buyer preferences and market adjustments in different housing sectors.
Inventory Levels
February 2025 saw a rise in inventory levels, providing more options for buyers. The balanced inventory and increased sales have kept market conditions stable, neither favoring buyers nor sellers significantly.
Interest Rates
Current mortgage interest rates remain relatively stable, supporting buying activity. Although specific rates fluctuate, analysts suggest that rates in early 2025 have not increased significantly, maintaining affordability for many buyers.
Impact of U.S. Tariffs on Victoria’s Housing Market
The recent imposition of a 25% tariff by the United States on key Canadian materials, including steel, glass, and appliances, is raising concerns in the construction sector. These tariffs are expected to:
- Increase construction costs, affecting both new developments and renovations.
- Slow the pace of homebuilding, reducing supply and potentially pushing home prices higher.
- Impact affordability, especially for first-time buyers and developers working within tight budgets.
The Canadian Home Builders' Association has warned that these trade tensions may decelerate home construction across Canada, including in Victoria. Builders and developers may face higher material costs, which could trickle down to buyers in the form of higher home prices.
Spring Market Outlook
Despite strong early-year sales activity, the spring market may face some challenges due to rising material costs linked to tariffs. While demand remains steady, affordability concerns and potential delays in new housing projects could impact buyer and seller behaviors.Key takeaways for the spring market:
- More inventory should help keep prices from rising too quickly.
- Interest rates remain favorable, continuing to support buyer confidence.
- Tariffs on materials could push construction costs higher, potentially leading to higher home prices later in the year.
Market participants, including buyers, sellers, and investors, should monitor these developments closely as they navigate the spring market.